Ferguson supplemental capital budget centers on housing; advocates push larger investments while local governments warn against $75M public-works sweep

The Senate Ways and Means Committee on the first meeting of the 2026 legislative session received a briefing from the Office of Financial Management on Governor Ferguson’s proposed supplemental capital budget and heard more than three hours of public testimony from housing advocates, education and higher-education representatives, tribal and rural leaders, and local-government officials.

Jen Masterson, senior budget advisor for the capital budget at the state Office of Financial Management, told the committee the governor’s supplemental proposal relies on just over $400 million in available bond capacity — including roughly $355 million left by the legislature and about $46 million in savings — and proposes $396 million in new appropriations, leaving about $5.4 million in remaining bond authority. Masterson also said the supplemental includes $68 million from the Common School Construction Account, $67 million from Climate Commitment Act accounts, and $13 million in federal funding.

Masterson emphasized housing as a central priority. "The governor's housing proposal makes up just under 40% of the total capital budget," she said, outlining a housing package with $237 million in capital investments and $225 million proposed for the Housing Trust Fund. That Housing Trust Fund allocation, Masterson said, includes $81 million to develop approximately 1,900 affordable rental units, $73 million for homeownership (about 650 units), $50 million for preservation and repairs (including flood-damaged homes), and $20 million to acquire and preserve manufactured and mobile home communities — an investment OFM estimates would prevent roughly 425 households from displacement.

Advocates who testified uniformly supported the housing emphasis but urged larger investments. "We're excited about this capital budget," Jason Gauthier of South Sound Housing Affordability Partners said, and asked the legislature to consider an additional $25 million–$50 million for the Workforce Housing Accelerator Program to help projects that can start or finish within six months of funding. Ryan Donhue of Habitat for Humanity said the $73 million designated for affordable homeownership is a "smart, cost-effective way" to expand stability for working families.

Speakers representing manufactured-home communities and tenant groups described imminent displacement risks when parks are sold. Will Booth, a resident and representative of manufactured-home owners, praised the proposed $12.5 million for preservation and urged that funding be retained. Tenants from Colony Mobile Home Park and other communities recounted auctions and financial barriers that make preserving parks without public partnership nearly impossible.

Education and higher-education witnesses thanked the committee for restored planning grants and minor-works funding but pressed for additional construction and decarbonization support. Masterson noted $28 million for the school seismic safety program, $74 million for small district and tribal-compact modernization, $2.5 million for lead remediation in schools, and $22 million in higher-education minor works. University and community-college representatives warned that the supplemental does not include the larger decarbonization investments they say are needed to meet state requirements.

Environmental and natural-resource proponents asked the committee to deepen investments in the Recreation and Conservation Office programs. Land trusts and tribes asked specifically for additional funding for community forest grants and salmon-recovery projects; David Trout of the Nisqually Tribe highlighted projects intended to protect habitat while supporting local economies and climate resilience.

Local-government groups and infrastructure lenders raised a separate concern: language in the proposal that would transfer $75 million from the Public Works Assistance Account (the state's low-interest loan fund for local infrastructure) to the general fund. "This transfer is in addition to an already planned $288,000,000 for this year," Axel Swanson of the Association of Counties said, warning the sweep would put public-works programs at risk. Vince McGowan, chair of the Public Works Board, and Scott Hazelgrove of the Association of Sewer and Water Districts said the transfer could force revocation of loan commitments and imperil shovel-ready wastewater, stormwater and drinking-water projects. "If those commitments are indeed removed, we believe that there's a possibility that many of these projects will not be able to go forward," Hazelgrove said.

No formal motions or votes were recorded during the hearing. The committee closed the first meeting after taking testimony in multiple panels and calling for no further in-room speakers; members did not adopt final changes or take votes on the supplemental budget during this session.

The Ways and Means Committee will use the testimony and OFM briefing as it drafts its own supplemental capital recommendations in the coming weeks; several presenters asked the committee to preserve or increase the governor’s housing investments and to reject the proposed $75 million transfer from the Public Works Assistance Account.